For those that have Roth IRA’s one of the important things to keep up with are the withdrawal rules. These rules can change from year to year, so it is important to stay on top of what the latest rules are. Some important rules highlights for the 2010 Roth IRA withdrawal guidelines are:
You may begin to withdrawal your Roth IRA funds after the age of 59 and a half years of age without penalty. Withdrawals made before this age generally face a ten percent penalty on the withdrawal.
There are some exceptions within the 2010 Roth IRA withdrawal rules for early withdrawals. If for example you are disabled, or if you are using the money to buy your first home, then the penalties probably don’t apply to you.
There is something known as the five year rule that applies in the 2010 year. The five year rule is a rule that states that if for some reason you do not begin to make contributions until the age of 57, then you would not be able to make penalty free withdrawals until age 62. This rule is in place to encourage contributions to your IRA at a younger age.
Remember the Roth IRA is set up to discourage early withdrawal, it is intended to be a long term investment plan. The addition of more rules that try to prevent early withdrawal can be expected, and the prudent investor would be wise to keep up with the yearly changes in the rules. That being said, the Roth IRA is still one of the best long term retirement investments that one could choose, given the fact that the withdrawals are tax free. The taxes are taken out before you put them in your fund when you’re younger, and usually in a lower tax bracket, and thus they are far less then at the end of the transaction. 
{ 0 comments }